The so feared August 15th law!

Since August 15th 2023, a new law was introduced requiring a proper transfer of legal ownership when selling and buying a second-hand motorbike.

A general panic has surged from this news among both the expat and the local community. However, this is not as new and recent as most people think. Let us explain to you some background on these rules, then we can talk about the norms.

The registration laws and process have existed for a long time, but the process was not enforced until 2020. The new laws are penalizations for those who do not sell a motorbike by doing the legal transfer of ownership process. Evidently, the objective is to formalize motorbike paperwork across Vietnam.

According to the existing laws, this is the process to transfer a second-hand motorbike:

1. Typically, and for the grand majority of cases, the ownership transfers start with a notarized sales contract which is made at a notary office. At the notary, we make the sales contract, which is the first step and mark the starting date for the process. The minority of cases that do not need a notary to sign over a sale relate to companies and not individuals.

Picture 1: Authorization contract and sales contract sample

2. The seller of a second-hand motorbike in their name must keep the license plate and the registration card (blue or yellow card), this is the recall process, in Vietnamese: thủ tục thu hồi. This process is done at the police station responsible for the district where the motorbike is registered. This process does require an online registration to apply for the recall.

 Picture 2: Keep the license plate and the registration card (blue or yellow card)

3. Once the recall process is done, there is a delay of 30 days from the sales contract to finalize the new registration. Initially, a fine for late registrations already exists, this is usually charged at the police station together with the new license plate fee and ranges from 700,000đ and 1,000,000đ (we are not able to confirm whether this is official or not, you know what we’re talking about…) With the new laws added, there is an extra fine passed these first 30 days charged to the seller for failure to transfer the ownership correctly. This means that the transfer can still be done, there will simply be fines to proceed when the original documents expire. The fine for not registering correctly will be an official one, though at this moment we are unable to confirm whether it is a fixed amount or variable.

Picture 3: Appointment letter sample

4. The buyer will be the responsible person for registering a new plate and covering the costs of registration. The buyer must take the plate-less motorbike to the police station for a check. Note that motorbikes without a plate are not authorized to drive in traffic, hence you may want to consider a truck to transport the motorbike. The official fine to retrieve a motorbike impounded for not having a plate is 5,000,000đ.

Picture 4: The buyer must register a new plate and cover the costs of registration

5. The final steps are not different from the previous way. The buyer provides the necessary documentation to apply for a plate in their name. Once the plate is issued, the buyer is provided with a temporary registration to then obtain the new registration card in 15-21 days. For reference, the road traffic laws in question are the following:

Other changes relating to the new law:

  • All brand-new motorbikes with 175 CC engines or over must be registered for the first time at the Bình Thạnh police station where cars and big bikes typically were registered. For a short period of time this process had been decentralized to district police stations, but with the new law we are back to 282 Nơ Trang Long (282 for shorter) for big bikes.
  • All brand-new motorbikes with under 175 CC engines must be registered at the district police directly.
  • All second-hand motorbikes, whether small or big, are to obtain a new registration at the district police station and not the infamous 282 office.
  • This means that the recall process for second-hand big motorbikes is to be made at 282, while the new registration will be made at the respective district police.

What does it mean to you?

We will now detail some consequences depending on the ownership situation. Find the situation that pertains to you to see the results. Note that we are separating the “legal consequence” which is the one by the book, and the “real consequence” which considers the actual actions of the police.

Current SituationLegal consequenceReal consequence
_ You have a motorbike with a registration card on someone you don’t know._ You may possibly have a handwritten sales receipt._ You do not have notarized documents supporting the sale.1. From 01/01/2021, it is no longer possible to transfer the ownership of bikes with “lost owners”. So, your bike is now non-transferable, and you are technically at fault as well as the original owner (if still alive and residing in Vietnam.)2. A handwritten sales receipt does not have value. The same goes for shops’ sales receipts, though it is important to keep all documentation anyway.3. Without notarized documents, it is not possible to transfer. RESULT: NON-TRANSFERABLE.1. You can still sell the bike with the blue card, but you lose a lot of value in the sale.2. If you sell the bike, you are not at risk of anything. You basically transferred the risk to the next person.3. At police stops, the police will be entitled to impound the bike and then you lose it forever. This might be avoided with a hefty “gift”. RESULT: YOU SHOULD SELL AS SOON AS YOU CAN, EVEN IF FOR AN EXTREMELY LOW VALUE.
_ You have a motorbike with a registration card in someone else’s name._ You have notarized documents that support the previous sale, but you do not know the person who signed them last._ You may have a receipt from the shop that sold the bike.1. Whether the notarized contract is a power of attorney (POA from now on), in Vietnamese “hợp đồng ủy quyền” or a sales contract, “hợp đồng mua bán” in Vietnamese; if you do not know the last person who signed it, then you will not be able to use the contracts to make a transfer.2. Notarized documents can only be used if the last signatory is reachable and available. This can happen since some second-hand shops have been selling bikes with contracts without finalizing the transfer process.3. If you have a sales receipt from a shop, you can go back to that shop to hopefully arrange a transfer, they may have the necessary contact. RESULT: NON-TRANSFERABLE.1. If you have a POA not in your name, and police control you, they may accept the POA as proof of ownership even if not in your name. This is not a guarantee as it will depend on the officer at the time.2. If you have a sales contract not in your name, police may give you a hard time, though once again a hefty “gift” may do the trick. This is not guaranteed though since police can go by the book at any time.3. With a sales receipt, you can at least prove precedence and you can expect police to be lenient. RESULT: NON-TRANSFERABLE, BUT YOU MAY GET AWAY WITH IT AT CONTROLS.
_ You have a motorbike with a registration card in someone else’s name that you don’t know._ You have notarized contracts of which you were a signatory.1. If you signed a notarized POA or sales contract, then you can change the registration to your name.2. If you are a foreigner and do not want to register NN plates (plates for foreigners), yet you did already sign a notarized contract, you can then either cancel the previous contract in your name or make a new one of the new registrant. For this, however, the same people who signed the last contract must re-sign the cancellation and new contract together at a notary office. RESULT: TRANSFERABLE!1. You have enough information to show the police you are a legal owner of the bike.2. The police will not have a reason to impound the bike (assuming you did not have an infraction that required it) nor to penalize you for ownership matters. RESULT: YOU’RE GOOD, BUT YOU SHOULD FINALIZE THE PROCESS BY REGISTERING YOUR NEW PLATE, THE CONTRACT ALONE IS ONLY A STEP.

Other considerations:

  • Difficult situations can be sorted out by contacting the original owner. While this is almost impossible in most cases, depending on the province and district the local police may be able to help. Commonly this happens in poor and remote provinces, so for most expats, it is an impossibility.
  • In the big cities, the police will not support finding the original owner if you don’t have the contact. This concerns HCMC, Da Nang, and Ha Noi, though in some other medium-sized cities, it may be the same case, especially the ones with more expats like Nha Trang and Hoi An for example.

What do you need to do now?

If your bike is indeed transferable and the registration is not yet in your name, you should then register it as soon as possible. Not necessarily on your name, but it can be on a trusted Vietnamese person with whom you keep contact. If your bike is non-transferable there are in reality little chances that you will get in trouble, especially as a foreigner, but targeting full legal ownership is a good idea and it is our best advice. This means, you should get rid of your non-transferable bike and buy one with proper ownership transfer. If your bike is non-transferable and its value is low enough not to bleed a loss, then you don’t have much to worry about. By low value, we mean bikes for under 15,000,000 VND. Police won’t be looking much at them anyway.

Conclusion

The Extra Mile officially advises people to regularize their motorbike registrations. Evidently, we cannot include all the relevant information about this process and laws in one article. The paperwork waters of Vietnam are tricky to navigate. As a result ownership transfer costs and processes are case per case since too many factors play in, if you need support or advice, come over to us to learn the fastest and most convenient solution for you.

Written by Renzo Linares on August 29th 2023. With important contributions from our staff Thành.